Ghana wants more for its cashews, but it's a tough nut to crack

Ghana is known for its cashew nuts, which are an important export crop for the country. Cashew nuts grow from the cashew fruit, and many farmers in Ghana rely on this crop for their livelihood. During my visit to Accra, the capital city, I encountered a street vendor selling a small bag of roasted cashew nuts for about 75 cents. While this may not seem like a lot of money to someone from the UK, I was shocked by the price markup. The cost of that small bag was at least 4,000% higher than what a Ghanaian farmer would receive for the same weight of raw, unshelled cashews. When I tried to express my surprise to the vendor, she did not understand my English or my reasoning, as the price was clearly printed on the packet. Ghana ranks as the second-largest producer of unprocessed cashew nuts in the world, following Ivory Coast. Approximately 300,000 Ghanaians earn a living by growing cashews. One farmer, Nashiru Seydou, who has a farm in the northeast region of Ghana, shared that the work is challenging, and the supply chains are often unreliable, making it difficult for farmers to survive. He mentioned that he currently receives around $50 for a large 100kg sack of unshelled cashews, which is not enough to sustain his family. Bright Simons, an entrepreneur and economic commentator in Accra, has studied the economics of the cashew industry. He pointed out that while farmers sell their nuts for about $500 per ton, roasters and retailers can sell the same nuts for between $20,000 and $40,000 per ton. Ghana produces around 180,000 tons of cashews each year, with more than 80% being exported in raw, unshelled form. This generates approximately $300 million in export revenues, but it also means that Ghana misses out on the significantly higher profits that come from selling roasted, ready-to-eat cashews. Mildred Akotia is one individual working to change this situation. She is the founder and CEO of Akwaaba Fine Foods, a company that currently processes only 25 tons of cashews per year. Ms. Akotia argues that the high cost of credit in Ghana makes it difficult for her and others in the industry to invest in the necessary machinery for roasting and packaging. She explained that local banks charge around 30% interest for loans, which is not feasible for manufacturers. As a result, many businesses have to rely on soft loans from family and grants from donor agencies. This financial situation is why less than 20% of Ghana's cashews are processed locally. Most of the raw cashews are exported to large factories in countries like India, Thailand, and Vietnam, where they are roasted and packaged. Interestingly, some of these packaged nuts are then shipped back to Ghana, where they are sold at prices similar to those of locally roasted cashews, despite the long journey and additional costs. This situation is not unique to cashews; it also occurs with rice, which is grown in Ghana but is often imported from Asia at lower prices. In 2016, the Ghanaian government attempted to implement an export ban on raw cashews to encourage local processing, but the plan was quickly abandoned due to backlash from farmers and traders. Without access to affordable loans, it was impossible for enough new Ghanaian roasters to enter the market. Consequently, the price of raw nuts plummeted, and many went unsold. Recently, there have been discussions about increasing tariffs on raw cashew exports and prohibiting exporters from purchasing cashews directly from farms. However, experts like Bright Simons believe that these policy changes overlook a crucial aspect. He argues that local producers need to focus on improving their business practices and expanding their companies. To achieve this, they need to promote the consumption of cashews among Ghanaians, creating a larger market for their products. Prof. Daron Acemoglu, a Turkish-American economist and Nobel Prize winner, agrees that building a strong local market is essential for the success of Ghana's cashew industry. He emphasizes the need for improved access to international markets for processed cashews. He points out that many local businesses face challenges such as unskilled labor, inadequate infrastructure, and corruption, which hinder their growth. Mildred Akotia has ambitious plans for her cashew business. She aims to establish her own logistics system to process cashews directly from the farms. She has received numerous inquiries from potential buyers in the UAE, Canada, and the United States, but she struggles to meet the demand due to a lack of available cashew kernels for roasting. She believes there is a strong market for her products both locally and internationally, and she is determined to enhance the reputation of Ghanaian processed foods.